The Economic Effects of Airline Deregulation

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In 1938 the U.S. Government took under its wing an infant airline industry. Government agencies assumed responsibility not only for airline safety but for setting fares and determining how individual markets would be served. Forty years later, the Airline Deregulation Act of 1978 set in motion the economic deregulation of the industry and opened it to market competition. This study by Steven Morrison and Clifford Winston analyzes the effects of deregulation on both travelers and the airline industry. The authors find that lower fares and better service have netted travelers some $6 billion in annual benefits, while airline earnings have increased by $2.5 billion a year. Morrison and Winston expect still greater benefits once the industry has had time to adjust its capital structure to the unregulated marketplace, and they recommend specific public polices to ensure healthy competition.

Book Details

84 Pages

Brookings Institution Press, December 1, 2010

Paperback ISBN:
9780815758457

Ebook ISBN:
9780815708063

About the Authors

Steven Morrison

Clifford Winston

Cliff Winston’s research focuses on microeconomic policy and government performance. He has written extensively on regulation and transportation.